A preliminary report by the government estimates that the economy could grow by as much as 1.7 percent during the year’s second quarter when compared to the first, La Nación reports. Salary increases, more imports and the fact that it’s harvesting season for the farming sector are the main factors that will contribute to the improvement.
Last week, Treasury Minister Nicolás Dujovne anticipated that the economy will grow by more than 3 percent this year: “judging by the numbers we are seeing in tax collection and international trade prove that we are going through a second quarter in which economic growth, spurred by the farming sector, accelerated,” he said.
Private analysts consulted by the outlet agreed with the government’s estimates. Fausto Spotorno, head economist of Ferreres & Asociados consultancy firm, said that the “second quarter will be better than the first because the numbers are good, but also because April last year was rather bad.”
Another economist, Federico Furia, coincided with this view and added that the increase in public works and the certain possibility that the Central Bank (BCRA) will lower its interest rates — since it won’t be as attractive for people to invest in its treasury notes, there will be more available on the streets that will help the economy grow — also will contribute to this. “The economy will grow by 1.8 percent in both the second and third quarter,” he posited.
The Macri administration expects the economy to pick up as October’s mid term elections loom large, as good news within that area generally translate into more votes. As a result of this, and same as all other administrations before them, the government is “inundating” the country with public works projects, as their electoral benefit is twofold: it’s a source of employment and once it’s finished people are directly benefited by a specific action from the government, something that can also capture votes. While the Casa Rosada remains publicly optimistic, and a fair number of private consulting firms forecast some level of stability too, any pragmatist that has been around for the last 15 election cycles would be quick to predict that the economy is set to decelerate after October’s elections.